Fintech companies are the rave of the moment. With the disruptive tendencies, these companies are now giving traditional finance companies a run for their money. As an entrepreneur and a tech enthusiast, it may be profitable to start a Fintech company in no other country than the United States.
In this article, you will discover the easiest, yet most strategic way to start this company and scale it in the coming months.
What is a Fintech Company?
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A Financial Technology (Fintech) company is a startup or company that integrates technology to meet most of the financial needs of the target market. Worthy of mention is that a Fintech company also fulfills or meets the financial needs of the customers in several ways.
A Fintech can be designed to offer these solutions via:
- Cryptocurrency wallets
- Mobile banking apps
- Stock trading apps.
- Payment apps.
By and large, the core objective of Fintech is to disrupt the existing solutions and offer better alternatives to what traditional service providers already offer.
Steps to Starting Your Fintech Company in the U.S.
Let us talk about the steps you must take to establish a successful Financial Technology (Fintech) company in the United States.
1. Ruminate and Validate the Fintech Business Idea
In addition to providing quality financial services by the use of software, a Fintech company is also doing so to make money. Thus, it must be treated as a business.
First, you have to think of a business name for the brand. After this, focus on making the most out of other important areas, such as:
Unique Market Opportunity
If your Fintech must thrive in the U.S., it has to offer something better than what both traditional finance and other Fintech companies offer. The market opportunity must be unique and this can be adjudged by:
- The streamlined and easy process of transacting with your Fintech solution.
- Analyze what your competitors are already offering and come up with unique strategies and services to beat the competition.
- Making in-depth market research to be certain of the receptibility of your solutions in the target market.
Test before Launching
It is expedient to carry out hypotheses tests to be sure of the viability of your Fintech idea. This includes finding out if the solutions you intend to offer already exist in the target market. If these solutions are already existing, dig deeper to find out if certain aspects need to be upgraded. That should help you in pivoting and reinventing the wheel.
2. Niche Down your Fintech Company
The truth is that anything that has to do with software-based financial services is broad. Today, we have Fintech companies playing big in the agricultural and investment spaces. Fintech companies also provide cryptocurrency payment solutions, as well as traditional cross-border payments.
Niching down or focusing your brand on a niche can help you dominate faster than you would have done by targeting the entire Fintech market.
Examples of Fintech niches you can consider are:
- Finance-related data analysis
- Tax services/accounting
- Trading and investments
- International/cross-border money transfers
- Financial management tools
- Alternative finance
3. Check the Applicable Regulations
One critical consideration to starting a Fintech company in the U.S. is to ensure that the business complies with existing regulations in the market. As a Fintech service provider, your startup is subject to scrutiny, considering that it has access to both data and the financial interests of its users.
As such, complying with the applicable regulations in the state of operation is very important. Here are critical factors to look into when getting to know the regulations:
Your Fintech company has to meet the requirements of the General Data Protection Regulation (GDPR). The GDPR is a regulatory policy that sees the regulation and monitoring of businesses that operate in the finance sector. It also monitors how these businesses make use of the information or data gotten from the customers.
Know Your Customer (KYC)
The Know Your Customer (KYC) policy is designed to help Fintech companies to learn more about their customers. This includes their personal information, such as names, telephone numbers, and addresses.
Anti-Money Laundering (AML)
The AML policy is also important as it determines the readiness of your Fintech company to restrict money laundering on the part of the users/customers.
4. Form a Team of Professionals
Now, form a team that will help in building the Fintech brand. Understandably, you may find it hard to constitute a team at the early stage and this is because the talent pool may be limited in your location.
That notwithstanding, you can be lucky to find a professional Fintech app development team through any of the following places:
- Online business directories, including forums.
- Making a Google search.
- Asking friends for recommendations.
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5. Use the Best Tech Stack
What app development framework do you want to use? Also, what databases and programming languages do you prefer? The most popular are:
- Databases: PostgreSQL, MySQL, Redis
- Programming Languages: Ruby, C, Java, C++
- Frameworks: Spring, Node.js, Django
6. Start by creating a Minimum Viable Product (MVP)
Do not go all out at once. It takes time to get everything in place. This is why you need to start Fintech company in America by creating a Minimum Viable Product (MVP). The MVP is a software development technique that involves creating only a few features or functions for testing purposes.
With the help of close associates and early-stage adopters, you can find loopholes that need to be improved on in the next phase(s) of development.
7. Raise Funds
Building a Fintech company requires a lot of money. Most of the time, the founders don’t have the funds to match the brilliant idea they have. Thus, consider raising funds through one or more of the following ways:
- Venture capitalists
- Bootstrapping with bank loans
- Crowdfunding from friends and colleagues.
Starting a Fintech Company in America the Easy Way
Building something great in the Financial Technology (Fintech) space is not an easy task. It takes time, money, and lots of patience to fine-tune everything. As time goes on, make continual improvements in your business solutions and consider partnering with relevant institutions in your target market.